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Giving Money to Grown Children: When to Stop and How to Break the Habit

Nancy Mann Jackson

If, when your children were teenagers, you started a habit of giving each child $200 on Christmas morning, then they may continue to expect to receive that gift every year, even when they’re in their 40s.

Or maybe one of your children doesn’t have the income to support the lifestyle he or she wants or was accustomed to while growing up in your home — and you’ve made a habit of helping pay for a big-city apartment or private school tuition for the grandchildren.

While every parent wants to help his or her children, continuing to give money to grown children on a regular basis can cripple your own financial situation as you near retirement. “I regularly see clients who have set up adequate retirement planning for themselves, but are now making unplanned, regular withdrawals to give money to their grown children, often putting their own retirement in jeopardy,” says Joe Heider, president of Cirrus Wealth Management Group in Cleveland.

If you’re facing questions about how to finance your own retirement and yet feel that your adult children expect you to regularly dole out money, it can be difficult to stop, even when you can’t really afford it anymore.

A Habit Worth Breaking?

Aging adults say giving money to grown children is one of the top financial habits they’d be willing to change in order to get their retirement on firmer footing, according to a recent survey from Merrill Lynch and Age Wave, which studied 50,000 respondents over four years.

Of those surveyed, 84% said they would like to educate their family on ways to be more financially independent, while 70% said they would consider cutting back on support to post-college children. Among those Americans who give their adult children post-college financial support, the average amount given is $6,800 annually, according to the study, an amount that could contribute substantially to the parents’ own retirement.

If you’re in the habit of handing over money to your adult children and the practice is affecting your own financial security, it may be time to make a change.

The Problem With Over-Generosity

There is nothing wrong with being generous to your children, even when your children are in their 40s or 50s — so long as you can afford it. But when that generosity starts to endanger your own finances, prevents your adult child from accepting responsibility for his or her own life, or creates tension among siblings, it can become a problem. “If you’re setting up a pattern of helping a child establish a lifestyle that they can’t support, you’re enabling that child to be fiscally irresponsible, which will probably create a crisis later,” Heider says.

Such situations create a codependent relationship between the adult children and the parents, says Jim Wiley, AIF, CEO and chief investment strategist at the Wiley Group in West Conshohocken, Pennsylvania. “The kids become dependent on the money, and the parents become dependent on the emotions they feel by helping their children,” he says. “They don’t want to disappoint the kids who are expecting cash at Christmas time, or whenever they expect it.”

Finally, in many families, there may be some siblings who are very fiscally responsible, but one adult child who simply can’t support the lifestyle he or she wants. Heider says he often sees aging parents who are willing to support that one child — even when it means draining the parents’ retirement accounts and causing resentment among the other siblings.

You may also like: What to Do When Your Adult Kids Keep Fighting

How to Stop the Bleeding

If giving cash to your adult children is causing similar problems, there’s nothing wrong with stopping. After all, your children are presumably capable of supporting themselves and shouldn’t need to depend on you for their ongoing survival. However, for many parents whose adult children have grown accustomed to receiving cash gifts, it’s not that easy.

“As a parent, you always want the best for your children, but you also have to put your foot down, and it can be difficult to do that, especially if you haven’t made a habit of doing so,” Heider says. “Children get used to asking for something and getting it. But when you tell them you have a fixed amount of resources and you can’t afford to supplement their lifestyle anymore, they have to accept that they have to live within their means.”

Wiley recommends asking your financial planner to redo your distributions from your retirement plan for the coming years so you can see firsthand how the gifts to your children are affecting your financial future. “Then simply tell your children, ‘Look, my financial advisor told me I can’t give you money anymore because I’m not going to have what I will need for retirement,'” he says.

If your adult child is depending on your money to finance his or her lifestyle, Wiley says to take the discussion a step further. “Tell your adult children that you and your spouse made a mistake by allowing them to depend on you financially,” he says. “Tell them that you want them to struggle like you did because it’s a chance for growth. It’s important for each person to navigate financial trade-offs to determine your highest meaning and purpose.”

Give Your Children Skills Instead

If the idea of simply stopping what has become a habit of giving money to your adult children seems too harsh or abrupt, consider helping them acquire some financial skills.

If your adult child has never learned to create and live on a budget, for example, find out if they’re aware of the apps available to help them do so, such as YNAB (You Need a Budget), Mint, and others.

Another option is to introduce your child to your financial planner; an introductory meeting with someone you trust could help set them on the path of understanding and handling their own financial matters more consistently. Plus, your child may be more receptive to receiving financial advice from someone who’s not their parent.

Finally, even if you decide that you need to stop funding an adult child, there are no rules that say you have to stop cold turkey. You may want to set a time frame during which the funding you provide will be reduced incrementally, while your adult child is learning new financial skills, training for a new career, or otherwise asserting their financial independence. A gradual reduction in funding may help give your child the incentive to make some real changes as needed.

How to Live With Your Boomerang Kids

How to Give Money Correctly

While habitual gifts of money can become damaging to an aging parent’s financial situation as well as an adult child’s future, occasional gifts can certainly be appropriate. Maybe an investment performed really well this year and you want to share the gains with your children: No problem, Wiley says.

“You might just say, ‘We had a great year and we want to give each of you this amount,'” Wiley says. “If you do give money to your adult kids, just don’t do it consistently. Never do it on a yearly basis, but a sporadic basis is great. Nobody is depending on it, but you are able to surprise them and help them occasionally.”

In addition to occasional cash gifts, Wiley recommends funding children’s or grandchildren’s educational accounts as a way of helping out. “This makes perfect sense because nobody is depending on it to fund their budget, but it’s an important way of helping your children or grandchildren financially,” he says.

Of course, if one of your children has an emergency, such as a medical issue or divorce, that leaves him or her in need of financial help, it’s okay to make an exception, Heider says. But aiding an adult child through an emergency is different from supporting a lifestyle for that child that he or she can’t maintain on their own.

Keep in mind that if you’ve raised your children to be responsible adults, they should be capable of supporting themselves. They may not yet have the lifestyle they want, but that’s life: You will not always be around to support them, and helping them learn to live within their means may be one of the most important things you can do to show your love for them.

Next Steps:

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26 Responses to "Giving Money to Grown Children: When to Stop and How to Break the Habit"
    • Joe Pariseau | July 22, 2018 at 4:20 pm

      Great advice!

    • Maria O. | October 11, 2018 at 11:33 pm

      Great article. It’s motivated and strengthen me to be able to discuss her dependency on me, needs to end, and she needs to start taking care of herself.

    • Lou S | November 21, 2018 at 2:42 am

      Good article….I abruptly stopped helping my kid with an explanation on how it was effecting my financial stability. I have a heavy heart but I know after several attempts of advice and financial assistance it was time. I did advise them to seek professional advice and hope they follow through.

    • Brenda E. | January 5, 2019 at 7:52 pm

      I needed to hear this information. I am a retired widow whose adopted daughter as been living beyond her means for years. My husband was extremely generous to her. Now that it is just me, I can not continue to support her financially. She will not talk to me about it, so I wrote her a letter to tell her she was now going to have to take care of herself. This is one of the hardest things I have ever done. She is angry and it makes me sad. But I had no choice. Thank you for the support that gave me courage to move forward.

      • Extra Mile Staff | January 7, 2019 at 2:49 pm

        Hi Brenda, thank you for your kind feedback!

    • Richard | June 10, 2019 at 7:23 pm

      I compliment you on your excellent post. Its hard to say NO but when the giving turns into them expecting it I draw the line. It was actually easier than I thought.

      I politely told my son that I would not be able to help him out financially any longer as we needed the money ourselves.

      He is looking for ways and means to earn extra revenue. Sometimes we can do more harm than good by supporting them constantly.

    • Roberta Mroz | October 26, 2019 at 6:00 pm

      Nancy, With a blended family getting both spouses to agree to a plan, for all children on both sides, can be the difficult part. Especially if there is a larger margin of retirement funds from one parent that the other. This can create a whole new can of worms. My spouse and I are working through that now while remembering that communication, with each other and all of the kids (41 to 50) is essential for our relationship, future, and sanity.

    • Vasantha Karan | October 28, 2019 at 10:33 pm

      Great article!
      I am currently going through this issue with with my 46 year old son! I have been bailing him out ever since his adulthood! Things got easier after I retired and moved away and and on a fixed income. He has a tendency to spend any extra money he earns on frivolities instead of saving it in his emergency fund and now apparently he is foreseeing an emergency with his truck and thinks he may lose his job if he has no transportation when the snows come! He has said he is breaking off relationship with me and his dad as we are refusing financial help! I have a decent IRA that was predicted to last until 90 years of age and I am 73. Should I bail him out of this transportation issue?

      • Beverly Robinson | December 14, 2020 at 9:50 am

        My adult daughter hounds me for money and acts as if I owe her something, even saying I should have never had kids then.

        I think it is a generational attitude, a sense of entitlement. Once grown I NEVER expected money from my parents, in fact I helped my parents out financially in their elder years.

    • Kini | January 1, 2020 at 12:45 am

      My 30 year old daughter is educated, intelligent, and currently an unemployed teacher. She does not have kids or boyfriend. I cannot pay her bills and more. I would like to retire comfortably in n 10 years.
      I just wanted to encourage the others with the same concerns. I am torn, because I feel that she will never talk to me again. However, my good friend told me that it is ok that be selfish
      Can you believe that she asked me to pay for nails and lip sync injections? She was such a sweetie pie, then hung out with a different crowd.

    • Nancy | March 4, 2020 at 5:29 pm

      I have been dating a man for 6 months that is sending his daughter at least $500+ per month so she can afford her lifestyle. I don’t want to judge him on this but I know that someday it will affect our life together. I know I have to let him go. It’s too bad because he’s such a nice man.

    • Kerry | March 4, 2020 at 9:37 pm

      I hope someone can help me. I have a 50 year old daughter that keeps asking for money to pay for her apartment. food, and phone. She has no job and says she keeps telling me she is applying for jobs. If she does get a job she never has it for very long. I have been telling her that this cannot go on. I have about used up my saving and I will not give her any of my other money I have saved (401k etc) I am at my wits end as to what to do. If I stop giving her money I think she will be living on the streets. She has no friends to live with as she has wore out her welcome with the ones she does have. She lived with my husband and me for awhile but he is the step father and says if she comes back, he will move out. I love him and do not want to lose him because of her. Her real father is dead but he was about the same. As he never held a job for very long. I am retired from a job that I held for 31 years. I just do not understand her. I hope someone can give me some kind of advice. I know I should just say no. Please help Thanks Kerry

    • frolep rotrem | March 23, 2020 at 8:42 pm

      Woah just what I was searching for, thank you for posting.

    • Kathy | May 9, 2020 at 12:39 pm

      We have 45 year old daughter who has no money. She has been living and engaged to a rich guy whose mother doesn’t like her. Mother wants her gone. She loves his lifestyle. Since Covid-19 her business in NY shut down. She can’t hold down a job for someone, so she always started own but never made any money at it. She has been asking me for years to help her out . I can’t do it anymore because my husband had bad accident in our home and had to retire. I’m 77 and he is 84. She always held it against him that he, after a while, cut her off. We offered her and so did my son to come home for a while to pull her self together but she said no. I need help and worried what will happen to her if his mother kicks her out. What will happen to her. She is a beautiful girl. Please tell me what I should do. She is well educated and we said get a job. Please help

    • Michelle Seitzer | May 18, 2020 at 5:13 pm

      Kathy, thank you for your comment.

      First let me say what a difficult situation you and your husband are in, and what caring, loving parents your daughter has!

      We certainly understand your concerns around your daughter’s living situation, her future career/work prospects, and the strained relationship with her fiance’s mother. It sounds like you’ve done all the right things—in terms of you and your son offering her a temporary place to stay and pointing her in the direction of good employment.

      It also sounds like you must focus on your husband’s care since his accident and subsequent retirement.

      But a mother’s heart hopes for their child’s independence and success no matter how old they are, and it must be so hard to see your daughter struggle while knowing that she’s bright and capable.

      Have you tried talking to your daughter about some realistic goals? For example, what does she see herself doing in 5 years? Where does she see her relationship with her fiance in 2 years? What is the job or career she’s always hoped for? Maybe by opening the conversation that way, you can get a sense of where she might be struggling and how you can help in ways that financial support alone could not.

      Also, a number of relationship and family experts shared their insights around parenting adult children in this article, Adult Children: The Guide to Parenting Your Grown Kids, which I wrote last year. Perhaps you’d find some resources in there to have these tough but important conversations with your daughter—and to find a place where you’re helping her without enabling her, or doing more than you’re truly able to at this time in your life.

      Here’s a helpful quote from the article:
      “How do you avoid enabling adult children, particularly when your adult child is demanding and needy (and perhaps has been that way throughout childhood)? Begin with setting boundaries with adult children and keep the goal of independence in mind. Work together to establish expectations. Talk openly about challenges and be honest in your communication about hurts and hopes.”

    • Cammie B | May 21, 2020 at 3:00 pm

      This is a real challenge in my life, as I don’t have children, but my soon-to-be fiance does. He is a widow, and his daughter, age 25, lives with him and he financially supports her in every way. She does work, but spends all her money on vacations, clothes, partying and eating out, and her fancy car. She has now decided to go back to school, since she can live off her Dad and get her education. She plans to be there at least until her 2 year degree is completed, she starts this fall. He is 62 and I’m 59, and I’ve been single for 22 years. So in periods of unemployment, I’ve had to cash in my retirement accounts to live on. I’m so concerned about retirement that I’m reconsidering if he and I can afford a future together or no, especially without financial boundaries with his daughter. I should mention, she’s a lovely girl and we get along well, so I’m afraid if we exert pressure in this area it will turn her against me, and I really want us to be a family. His older daughter lives in another state and is financially independent.

    • Jeff | September 10, 2020 at 8:07 am

      Kerry, I see so many parents commenting on here that they are afraid there children won’t talk to them anymore if they quit supporting them. To me that one is easy. If that’s the only reason they talk to you then just understand you probably didn’t raise them right. In your situation you say your concern is that your child will be homeless. I think your daughter should be able to use resources available like welfare or unemployment or whatever she is eligible for to pay for her living expenses. If it’s not enough then she needs to change her living situation. Not rely on you to make up the difference. I would tell her that. Hope this helps.

    • Kerry Balbiani | September 17, 2020 at 10:36 am

      I want to stop giving money to my 52 year old daughter She continues to get jobs and works for a few days and then quits Then she needs money for rent. I am afraid to not give the money as she will then have to live on the street. She lives in one room and I think all she does is eat and watch tv. I know I need to stop giving money but what do I do. I will soon have to stop as she has just about used all my saving. I refuse to give her money from my 401 plan as I use that as emergency money. How do I get it through her head that I cannot keep doing this. I just want to sit and cry as I raised such a child. Have two other children and they have jobs and do not have to give them money all the time. What do I do? I wonder if she can get some kind of assistance? Any suggestions would help. Thanks for letting me vent.

    • Rudy | November 4, 2020 at 11:30 am

      I have 2 grown sons. The oldest want me to pay for his apartment and didn’t want to work. My ex wife was extremely bitter when we divorced. She convinced my youngest son to agree to let her take his personal va college benefits for her personal things. While piling student loans on his credit. She also set him up to fail in college. He struggled through high school and his basketball coach and I set up a Jr College scholarship with tutor assistance. His mom said no and put him in a university starting with 7 classes. She put him in full time classes so she could get the max amount of money. Long story short. He fail the out of college owning $26,000 in student loans without even an associates degree. I was trying to direct him the right way but she was controlling his life. He is not working and ask me for money on a regular basis. Its not a lot of money and I can afford it but his bitter mom knows I love them and is trying to get in my pockets to bail him from what she took from him. I see what she’s doing but its still hard not to help when I can afford it. He only ask when he needs it. I usually send him what he asks for. How can I deal with this situation knowing his mom is purposely ruining his financial life to hurt me and him?

    • Nancy | November 11, 2020 at 2:05 pm

      I have the same situation with my 32 year old son. He is well educated and has no personal debt. He has only worked for 3 months and that was 3 years ago! He claims he has OCD, depression and anxiety. He takes medication, but will not seek treatment. He has been living at home during COVID. Things are bad on most days. How can I motivate him to find a job and be independent? I cannot afford to support him.

    • Lisa G | November 18, 2020 at 6:57 pm

      This starts young. It’s important to teach them $$ skills as children bc they definitely get worse w age. AND both parents must agree and not circumvent a set system. We can not seem to get out 23 and 27 year old boys to go to college and be independent. Talk doesn’t do it. Only pulling the plug will. And when one parent doesn’t stick to the plan it causes major problems in the marriage. Start early!!

    • Denise Cmar | November 27, 2020 at 11:19 pm

      I have a 27 year son with mental illness who lives at home. He is emotionally abusive to me his mother. He works hard but blows his money on gambling and medical marijuana. I originally was the one who would collect money for cell, car insurance, etc. $200 a month. Now my husband has taken it over. He does pay but then gets down to nothing in his account and asks me for money. I am foolish and give him money that he says is for gas. I know I am enabling him. I am physically and mentally exhausted from this ongoing battle. He has stolen from us and other family members. I would like to kick him out but they I feel bad. Any suggestions?

    • Kristy Cummings | February 6, 2021 at 7:07 am

      I have a son that is 21,he has not had a steady job in a long time.I pay his car note ,his insurance,and whatever else he ask for.I live on a fixed income,and I will do without just to make sure that he has.Like my electricity is fixing to be shut off.Him and his girlfriend just got their stimulas in and I asked for 60.00 to pay my light bill and they got mad at me.What do I do?Cause I feel bad when he is stuggljng but he don’t care if I do.

    • DD | February 28, 2021 at 2:15 pm

      My beloved, soft-hearted husband passed last month, leaving his two healthy, middle-aged sons and their families to now take care of themselves. Everything they could get or inherit later from their deceased Mom was spent immediately so they looked to their Dad next. Ongoing medical issues and expenses prompted my husband to tell them two years ago, support would have to stop. Nothing changed with their way of living. The phone calls started right before he passed and there was plenty of drama at the memorial service. There is nothing to give them now and they are very angry and, probably scared. Sadly, I doubt I’ll hear from them again since I’m the stepmother and somehow this will be my fault but I do wish them the best. People, please learn a lesson here and don’t cripple your children this way. You aren’t helping anybody and they won’t love you in the end.

    • Margaret | March 25, 2021 at 7:15 am

      Hi I’m looking for some advice please and maybe from someone that has solved their problem..my Daughter is 41 years old she has 2 children her 20 year old son lives with me ..she is working partime 3 days a week. I always seem to be lending her money that she never returns . pay bills for back tax her car it its never ending.. I know I need to say no and mean it .I have now told her she needs a full-time job that I can’t help her any longer..lm 67 still working pastime and trying to save a little for my retirement..I don’t want to fall out with her I feel I can’t do this any longer..Regards Margaret

    • Susan L Martin | July 16, 2021 at 2:12 am

      Nancy.
      Im going through the same thing. My boyfriend is 62 and his 2 grown children ages 23 and 27 are completely dependent on him financially. One has just recently gone to work. The other dyed her hair green (27 year old) and just sits at home. I have 2 very successful daughters ages 25 and 27. Its putting a strain on our relationship and im not wanting to move forward until this …if ever… is resolved.

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